Yingluck Axes Thai Commerce Minister After Moody’s Rice Critique

Thai Prime Minister Yingluck Shinawatra dropped Commerce Minister Boonsong Teriyapirom from the Cabinet following criticism that a policy to buy rice at above-market rates jeopardized the country’s fiscal position.

The move comes about a week after Yingluck cut guaranteed rice-purchase prices by 20 percent to stem losses the government estimates at about 137 billion baht ($4.4 billion) for last year. Moody’s Investors Service said on June 3 the subsidies hamper Thailand’s goal of achieving a balanced budget by 2017 and are negative for the nation’s sovereign ratings.

Yingluck is aiming to bolster her government’s popularity after polls showed a decline in support and farmers protested at her office in Bangkok. Thailand’s finance ministry cut its 2013 economic growth forecast to as low as 4 percent on June 27 from 4.8 percent previously because of a slow recovery among trade partners and weaker private sector spending.

Niwattumrong Boonsongpaisan, a minister in the premier’s office, will replace Boonsong. The rice policy, along with a minimum-wage increase and incentives for car buyers, was among the key campaign pledges from Yingluck’s party in winning a parliamentary majority in 2011. The win was the fifth straight victory for allies of her brother, Thaksin Shinawatra, who was ousted in a 2006 coup and has lived overseas since 2008 to avoid a jail term on charges he says are politically motivated.

In other changes, Pracha Promnog replaced Chalerm Yoobamrung as a deputy prime minister, with Chalerm appointed to head the labor ministry, according to a statement published in the Royal Gazette. Yingluck will take on the additional role as defense minister.

Rice Spending

Varathep Rattanakorn was named as a minister in the prime minister’s office and a deputy farm minister. Yuthasak Sasiprapha was appointed deputy defense minister, Yanyong Phuangrach was named deputy commerce minister, Benja Louichareon becomes deputy finance minister and Chaikasem Nitisiri takes over as justice minister. Chaturon Chaisang will be the education minister.

Thailand has spent 588.7 billion baht since October 2011 to buy 40.47 million tons of unmilled rice from farmers. The program has increased domestic demand and purchasing power by 2 percentage points and helped improve farmer income by about 115 billion baht a year, according to the government.

Yingluck’s popularity has fallen in recent months, Bangkok University said in a survey of 1,234 people taken from June 18 to June 20. The margin backing her as prime minister over opposition leader Abhisit Vejjajiva dropped to 8.6 percentage points, down from 14 in November 2012, the poll showed.

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